On Airlines – The Hidden Dangers in Believing Your Own BS

Commentary: Last week I wrote a short piece on lower oil prices becoming a management challenge for airline C suites, and their employees. My focus was really on labor – management relations, cost control, and how the discipline of higher energy prices is at risk for being lost. Since that time, a handful of articles have touched on similar topics with a focus on system capacity as well as airline pricing habits. During a recent airline conference call on earnings, a pesky Wall Street analyst challenged management on capacity discipline. Said analyst then got his hind quarters politely handed to him, depending on your perspective.

The gist of the analyst’s question was whether or not management was paying enough attention to capacity discipline when making new route decisions. The airline’s managers seemed to be pretty sure that they are, and I don’t have any reason to doubt it. The hidden danger here is that when you become so wonderful and so profitable you can be lulled into a false sense of security….or would that be, superiority?

A lot of interesting little things have happened in the airline industry over the last few weeks that bear watching, none more so than right here in my now hometown. Granted, each of these developments has some merit in the marketplace, and it will be interesting to see how things unfold. Cheaper oil, assuming it sticks for any substantial period of time, may become a catalyst for other changes in the airline industry, only time will tell. One thing is certain, the airline industry attracts its fair share of characters and egos, even if they are better at counting money than they used to be. My advice to airline managers and their co-workers – keep your eye on the ball, and be leery of your own BS.

Marshall Jackson is an aviation enthusiast and avid cruiser. Throughout high school and college he continued to pursue his dream of becoming a commercial airline pilot obtaining his commercial pilot’s license at age 19. After college Marshall started his professional flying career as a Jetstream, and later Saab first officer with a regional airline. Grounded by Type 1 Diabetes in 1996, Marshall transitioned into operations management at one of the world’s largest airlines performing safety and compliance audits at airline and vendor facilities worldwide. Applying the skills gained in that position, Marshall moved into airport operations management at one of his airline’s busiest airports. After 10 years in the airline business, Marshall moved on to a new career that includes plenty of travel and plenty of cruises, and that’s just the way he likes it.

Agree on all counts, this applies to pretty much all industries. The landscape changes constantly and in some years it is in the management’s favor, some years in the employee’s favor and some years in the customer’s favor. Right now, the landscape in the airline sector heavily favors management thanks to mergers, expanding/rebounding economy (strong enough to see record profits, but still relatively weak labor market for employees), and more stability in certain commodity markets.

This is one of those situations upper managers need to remember to not chew the hand that feeds you. JP Morgan hosts one of the largest aviation summits and yet they brazenly slapped one of their senior analysts. Definitely not something I would do.